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Real estate trends in 2016

In the year 2015, Indian real estate sector witnessed regulatory changes that included relaxing of foreign direct investment laws and the Union Cabinet approving the much awaited Real Estate Bill. Will this year bring a breath of fresh air for both buyers and developers? Check out the real estate trends for 2016!

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Trend #10 - The Home insurance market is going with the trend and re-invents itself with companies such as Lemonade (www.lemonade.com) that turns insurance to something good instead of a necessary evil. So now people can buy their home more easily, and get their insurance through an app without paying for brokers and agents.

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Real estate trends in 2016

1.
RBI has cut interest rates by 50 basis
points in two rounds previous year.
The positive effect of this will be seen
this year as buyers who are waiting for
much deeper cuts will stop doing so and
seal the deal

2.
Developers are changing track to attract
buyers into the residential markets.
Builders with large debts and piling
inventories are expected to ease the process
of property investment with easy payment
plans for homes

3.
The property in India has witnessed large
unsold inventories, a majority of which is in
Tier I cities including Mumbai, Delhi,
Hyderabad, Ahmedabad and Bangalore.
This has prompted most of the developers,
both big and small, to head to other
upcoming tier II cities like Pune and Chennai.

4.
The plan for 100 smart cities across India and
other such projects similar to the GIFT city in
Gujarat have already garnered huge interest
in the NRI and other communities. The
government has also made it easier for FDI to
flow in to Smart City projects. Such flow of
fund, it is expected to boost investment in the
affordable segment, which will lead to growth
in the real estate sector

5.
The change has already happened. A large
number of developers are re-drawing their
plans and are converting 2BHK apartments
into 1BHK apartments in India with fewer
and simpler amenities. This will end the
exclusive growth of luxury condominiums in
all the new locations

6.
The commercial office sector, which was a
saving grace during the slowdown, is
expected to further shine in 2016. Buyouts
of ready commercial space is on, and private
equity funds are now even looking at
investing in under-construction properties

7.
Several private equity (PE) funds are either
planning or are already on their way to
raise almost $4 billion from overseas
investors to invest in real estate in 2016

8.
The real estate sector that suffered much pain
in the past two years is moving towards a
more rational regime where developers,
having learnt from their mistakes, now focus
on project execution and delivery. 2016 is
expected to gradually move towards better
home sales and see a spurt in launches in
some locations

9.
After more than three years of PE funds doing
primarily debt and debt-structured transactions
in real estate, a few of them are again ready
to infuse equity capital into projects to get
better returns through long-term commitments